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1 https://wordpress.org/?v=5.2.3Federal government expected to lose more than $20 billion on wind energy creditshttps://investigatemidwest.org/2017/12/04/federal-government-expected-to-lose-more-than-20-billion-on-wind-energy-credits/
https://investigatemidwest.org/2017/12/04/federal-government-expected-to-lose-more-than-20-billion-on-wind-energy-credits/#respondMon, 04 Dec 2017 12:04:31 +0000http://investigatemidwest.org/?p=94988A complex system of federal and state tax credits has played a key role in the development of wind farms across the United States, with billions of dollars of support going to foreign and U.S. energy companies.

This reporting was done in partnership with Flatland, the digital magazine of Kansas City PBS. Find all of the stories here.

A complex system of federal and state tax credits has played a key role in the development of wind farms across the United States, with billions of dollars of support going to foreign and U.S. energy companies.

Nonetheless, the incentives have been effective, adding an annual average of 1.4 gigawatt hours of energy, according to research from Stanford University, which reviewed two decades of federal tax credit data and the growth of wind energy. The research found that when the credit lapsed, so did construction of new turbines.

The credits have been significant because wind turbine companies generate revenue in three main ways:

Selling the electricity they generate;

Selling renewable energy credits to companies and governmental entities that have a renewable energy portfolio;

Giving tax credits — largely the federal production tax credit and in some cases, state tax credits, said David Loomis, a professor at Illinois State University.

Federal incentives make up about a third of each project’s cost, Loomis said.

While the federal production tax credit is currently in the process of being phased out over the next five years, researchers say it has produced numerous jobs and billions to the economy.

Produced by Flatland and the Midwest Center for Investigative Reporting

Kevin Steinberger, a policy analyst at the Natural Resources Defense Council, found that these credits added 22,000 jobs and $23 billion to the economy in 2017 alone.

“Federal policy has a really important role in driving renewable energy growth,” Steinberger said. “We’ve been seeing more and more state and local policy to create clean energy.”

Although federal and state tax incentives make a large difference in making wind energy profitable, the role that property taxes play in decision-making is less clear.

The wind industry touts the benefits of construction jobs and increased property tax values, but inconsistencies in how wind turbines are assessed for property taxes make the impact of wind turbines on local tax coffers difficult to determine.

Most states have a system that varies from assessor to assessor, making the tax burden unclear, particularly before the turbines are installed.

“Whenever you’re part of an industry that builds things, you run into all kinds of variations,” said Peter Kelley, spokesman for the American Wind Energy Association. “Yes, it’s a challenge to navigate all different rules that states and counties have all across America, in all kinds of areas, you’re citing one example of differing policies in regards to local tax payments, but there are many, many different policies that vary.”

School districts are the largest recipients of property taxes. More than 99 percent of wind turbines are in rural areas, where school districts have been stressed by the decline in rural America.

About 71 percent of wind turbines are located in low-income areas, while 46 percent of wind turbines are in counties with high child poverty.

“We’re keeping our end of the bargain in creating economic activity in areas that need economic activity. There are benefits that flow throughout the rural economy,” Kelley said. “Local schools, ambulances, medical clinics and roads departments are all benefiting from increased resources, so even people who aren’t hosting the turbines benefit.”

The systems that states use to attract wind farms vary significantly.

In the Midwest:

Iowa offers a $0.015 production tax credit, similar to the federal production tax credit, and a five-year property tax exemption for the added value.

Oklahoma offered a 5-year property tax exemption, but the state made up for it by paying school districts an amount equal to those missing taxes.

In Kansas, the state offered a lifetime property tax exemption. Other incentives helped spark a building boom that eventually made it one of only five states that generate more than 20 percent of their power from wind.

In Texas, the state legislature gave property tax exemptions to renewable energy companies that brought industry to rural areas. That meant a loss of $5.8 billion in property taxes over the life of the exemptions, which is 10 years. The state has promised to cover those losses with payments to local school districts, according to the state comptroller’s most recent report. The Austin-American Statesman originally reported on this issue.

So far, Iowa and Oklahoma, which lead the way in subsidies, are also set to receive the most income from property taxes by 2020, according to a report commissioned by the American Wind Energy Association.

In 2020, Iowa is set to receive $120 million, while Oklahoma is set to receive $80 million in property taxes.

]]>https://investigatemidwest.org/2017/12/04/federal-government-expected-to-lose-more-than-20-billion-on-wind-energy-credits/feed/0University of Illinois to begin purchasing wind energyhttps://investigatemidwest.org/2016/12/09/university-of-illinois-to-begin-purchasing-wind-energy/
https://investigatemidwest.org/2016/12/09/university-of-illinois-to-begin-purchasing-wind-energy/#respondFri, 09 Dec 2016 21:41:29 +0000http://investigatemidwest.org/?p=48870The new 10-year agreement, announced by the UI this week, will supply the Urbana campus with 25,000 MWh of energy, about 8.6 percent of the total generation from the Rail Splitter Wind Farm.

Wind turbines north of Fifthian, Illinois on Wednesday, July 24, 2013.

The University of Illinois will start buying its energy from an Illinois wind farm, increasing its percentage of clean energy use from about 2 percent to 9 percent, according to a news release from the university.

The new 10-year agreement, announced by the UI this week, will supply the Urbana campus with 25,000 MWh of energy, about 8.6 percent of the total generation from the Rail Splitter Wind Farm.

The Rail Splitter Wind Farm is a 67-turbine farm near Lincoln, Illinois, constructed in 2008 for about $200 million. The farm is owned by EDP Renewables North America, which runs five windfarms in the state, worth about $1.5 billion.

Since it began operating in 2009, the farm generates 100.5 MW of energy, which is enough to power 35,000 households and is the equivalent of taking 45,000 cars off the road. At 8.6 percent of the total generation, the university’s share is equivalent of taking 3,870 cars off the road.

The university has pledged to obtain at least 120,000 MWh per year from low-carbon sources by FY20, which is about four times the amount of clean the university will use annually, even after this purchase.

The UI’s other share of clean energy is through its Solar Farm south of campus, which generates 7,863 MWh per year.

According to the release, the campus has reduced its energy consumption by 28 percent since 2008 through upgrades and conservation efforts.

“Obtaining wind power on this scale is a tremendous next step in diversifying and optimizing the university’s energy portfolio to meet future campus demand for more than 54,000 students, faculty, and staff. This long-term contract for low-carbon energy produced in Illinois reinforces the university’s commitment to achieving sustainability goals and developing partnerships for statewide economic development,” said Kent Reifsteck, director of utilities and energy services, in the release.